Friday, July 29, 2011

Why a Business Plan?

First let me unequivocally state that I think every business needs a business plan. I occasionally encounter people or articles that seem to state otherwise but when I delve into their thinking, we're on the same page. They agree with me. The hangup seems to be that when business owners think "business plan", they envision 30 pages of complicated written "stuff". A business plan doesn't have to be that complicated. But studies have shown that those who put their goals on paper have a one-two digit multiplier chance of success than those who don't. Why? Because hundreds of thoughts run through your head daily. Putting your goals and ideas to achieve those goals on paper provides FOCUS and CLARITY.

I've seen 8-year old companies that were floundering get back on track and soar by creating and committing to a business plan. (In one instance, there were three partners who couldn't seem to agree on anything. The process of drafting a business plan helped them sort out their roles and their differences. In the end, one partner left active participation in the company. This worked out for all involved, including the departed partner.)

With that said, here are a few excerpts from an article I read on Inc.com that gives some of the reasons why you need a business plan.

"To avoid big mistakes: The last thing you want to do is work ...for a year, only to realize you were doomed to fail from the start. Many (owners) learn the hard way that they didn't set aside enough capital to reach their goals, took on partners with the wrong skills and resources, or don't have a viable way to make money (consistently). Developing and sharing a business plan can help ensure that you're sprinting down the right path."

"To make sure everyone's on the same page: Chances are, you are not building a company by yourself. Ideally, you'll have partners, so you can launch faster, smarter, and with less need to pay employees or suppliers. Even if you don't have partners, you'll have family, friends, and advisers involved. A business plan helps get everyone involved in your (business going) in the same direction."

To read more, go to 5 Reasons Why You Need a Business Plan.



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